Left in place, tax will be as ‘big and onerous as ever’

Recently, a local daily newspaper ran two front-page articles along with a few editorials on the need for New Jersey to address the property tax dilemma. In one editorial, the governor was reamed for offering "half measures on tax relief."

Unfortunately, the newspaper’s, as well as the governor’s, fundamental analysis is wrong.

The problem with property taxes is not that they are too high due to poor use of administrative dollars on the part of schools. The costs of the services residents demand are what drive the ever-escalating property tax — every year school boards struggle to decide what they have to cut from programs.

Institute huge savings in these areas and people will still be overburdened by the size of this tax. The problem is how the tax burden for these services is distributed over the taxpaying population.

That is, the method of collection itself is wrong. The property tax is an unfair, inequitable tax.

It is not based on ability to pay.

Those out of work or retired and on reduced incomes are expected to pay regardless of ability to pay.

These folks pay disproportionately more than those with greater incomes.

Containing the rate of growth by more efficient use of government services, such as by regionalization, will not address the problem. Someone receiving Social Security of $1,000 a month along with a small savings will not find relief when their taxes merely remain at $5,000, or even go down to $4,000. They cannot afford the tax. Likewise, the unemployed or disabled have no income to pay either. In these cases the tax should not be assessed. But, whereas most people are not in this boat until they can do nothing about it, the problem persists. The 45-year-old homeowner does not apply the rule of 72 (divide 72 by a percent and that is how long it takes for the principal to double). So at the present rate of increase, in 10 years their $5,000 in annual taxes will be $10,000. In 20 years — when they turn 65 and their income drops — they will be expected to come up with $20,000 every year. Start this calculation at the age of 35 and those folks will be paying $40,000 a year.

Just as with their thoughts about accidents, people think it will never happen to them. When it does, they are helpless to do anything.

These are a few of the reasons why so-called solutions such as the "smart" initiative or regionalization are not real fixes. They leave the property tax in place. If it remains, it can never be reduced enough to be fair to those most burdened by it. Likewise, it will be exploited and — within a few years — be as big and onerous and oppressive as ever.

John C. Hendrickson

Red Bank